Poor Investing is Just a Bad Habit 4 – The Dog Within

by | Nov 18, 2000 | Archives

I am sure some of our delegates wondered what they could learn about investing from a dog trainer, but they were amazed as I explain below.

We picked up our hound from the kennel on the way home from Ecuador and I was thinking about our recent course at the farm. Dogs are similar to humans in many ways and the more I learn about training our pumpkin patch hounddog Ma, the more I learned about training myself. We have looking at the fact that to succeed with wealth we have to do what we love and to know ourselves.

When we were discussing this at the recent Inspired Investing course, I introduced John Quy, who I call the Dog Whisperer. He talked about how to train dogs, but his words helped us learn about oursleves. The point he made was that whenever our dog does what we want, if we give it reinforcement, positive or negative, the dog will become trained. The type of reinforcement does not matter for the training to have an effect, John explained. Though he likes positive reinforcement (it makes for a happier, more stable animal), he pointed out that negative reinforcement is just as effective.

In other words if the dog learns he'll get a hot dog each time he sits, pretty soon when you say sit, the dog sits even if their is no hot dog. However if every time you say sit and the dog does not, he gets whacked, he'll start responding to the word sit as well (maybe not the way the owner wants, but the dog will respond).

This led to a great discussion in our course because it was pointed out that our subconscious is very much like a dog's mind and as investors we reinforce it negatively too much of the time. Whenever we take any action that results in what we view as a mistake (such as losing money on an investment), we punish ourselves internally.

Guess what? This is reinforcement.

As strange as it seems every time we admonish ourselves for making a mistake, we actually set ourselves up to make it happen again! We actually train our subconscious to make poor investments. Think about how that can affect your investing.

Until next message, good global investing.